Lack of Trial Transcript Dooms Appeal Challenging the Nature of Contract Between Warehouse Owner and Contractor

A warehouse owner’s victory over its shelving contractor in a breach of contract dispute is educational on many fronts. It serves as a reminder that, not only should you get every term of your contract included in writing, you should also make sure that a written record also exists in a breach of contract trial, in the event that you need to appeal the trial court’s ruling in that case. The lack of a transcript of the trial court proceedings meant that the 3d District Court of Appeal had no choice but to uphold the decision in favor of the owner and against the contractor.

The origins of the case stemmed from National Deli LLC’s contracting with Allied Shelving & Equipment, Inc. to provide and install a system of large shelves in National’s warehouse. When the job was finished, neither side was happy, and each accused the other of breaching the contract.

National and Allied were not able to resolve their disputes and ultimately went to court on their respective breach of contract claims. Neither side elected to request that the proceedings be transcribed. This would prove fateful for Allied.

The trial court ruled in favor of National on its breach claims and ruled against Allied on its claims. Allied appealed, with the central thrust of its appeal asserting that the trial court used the wrong law for deciding the case. The contractor claimed that the case should have been decided using Article II of Florida’s Uniform Commercial Code, not common law. If the contract in this case was a contract for the sale of the shelving units, it was a contract for the sale of goods, and Allied’s argument would be correct, since the UCC would apply to such a contract. If, however, the contract regarded Allied’s service of installing the shelves, it was a contract for the sale of services, and the common law applied, meaning that the trial court was correct.

In the end, the appeals court concluded that the contract between National and Allied was, like many commercial contracts, a hybrid that involved both goods and services. To decide whether the UCC or common law should apply, the appeals court would have to analyze the facts in the case determine whether the “predominant factor” was the goods or the services.

In this case, the trial court clearly concluded that the parties’ contract was predominantly one for services. In some cases, an appeals court can review the record and reverse the trial court if the lower court was wrong in its conclusion. However, in Allied’s case, given the absence of a transcript from the lower court proceedings, the appeals court had no way of determining that the trial court was in error in its conclusion as to the nature of the contract and the applicability of the common law. Therefore, it had no choice but to uphold the ruling.

Handling commercial disputes involves many considerations and decisions, both business and legal, and requires keeping one eye on potential future impacts in order to ensure that you are prepared for any outcome. For sage advice and zealous representation in your commercial litigation matters, consult the experienced Florida commercial litigation attorneys at Stok Folk + Kon. Our attorneys can make sure that you are placed in the best legal position possible.

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